Updated October 13, 2022 at 12:41 PM ET
The breach in U.S.-Saudi relations widened Thursday, as the White House accused the kingdom of helping Russia fund its war in Ukraine by pushing up oil revenues.
Last week, the OPEC+ group of oil producers, including Saudi Arabia and Russia, decided to cut oil output by 2 million barrels per day, leading to anger in Washington, with members of Congress calling to retaliate.
National Security Council spokesman John Kirby, in a sharply worded statement, accused Saudi Arabia of strong-arming other oil producing countries to agree to the major oil cut.
“The Saudi Foreign Ministry can try to spin or deflect, but the facts are simple,” Kirby said, adding that the kingdom knows the decision will “increase Russian revenues and blunt the effectiveness of sanctions” against Moscow.
He said the administration had urged Saudi Arabia to delay the decision, arguing “there was no market basis to cut production targets.”
“Other OPEC nations communicated to us privately that they also disagreed with the Saudi decision, but felt coerced to support Saudi’s direction,” Kirby said.
Kirby’s remarks followed a statement Wednesday night from Saudi Arabia’s Foreign Ministry, rejecting claims that the oil cut was “politically motivated against the United States” or that the Saudis were “taking sides” in Russia’s war with Ukraine. The Saudis said the oil decision was made unanimously by OPEC+ members “based purely on economic considerations.”
A dramatic cut to the amount of oil on the market could drive up fuel prices in a rocky year at the pump.
President Biden told CNN on Tuesday there would be “consequences” for Saudi Arabia but declined to elaborate on what action he is considering.
“This move is clearly going to severely strain an already bad relationship between the U.S. and Saudi Arabia and spark a pretty significant backlash across both sides of the aisle in Washington, D.C.,” says Jason Bordoff, director of Columbia University’s Center on Global Energy Policy.
Biden lobbied against cutting oil supplies
It wasn’t just the sheer size of the cut in oil production by OPEC+. It was also the timing — coming less than three months after Biden visited Saudi Arabia to lobby against such a reduction, and just ahead of the U.S. midterm elections where prices at the gas pump could have an effect on voters.
“It feels punitive against the Biden administration,” says Jonathan Panikoff, an expert on Middle East security at the Atlantic Council and a former U.S. intelligence analyst on the region.
“I think it’s hard to think it’s otherwise because the Saudis aren’t naive about the U.S. political situation,” Panikoff says. “It may not have been the core reason for doing it, but they absolutely were happy to do it.”
Saudi Arabia’s gearing up for weaker fuel demand
Firas Maksad, a senior fellow at the Middle East Institute, a think tank in D.C., says Saudi Arabia has legitimate business reasons for the cut. It’s seeking higher fuel prices now in case a global recession reduces demand later.
This week, OPEC — which stands for the Organization of the Petroleum Exporting Countries — lowered its forecasts for crude oil demand in the coming months because of global inflation, soaring interest rates and geopolitical tensions.
Maksad says U.S. officials were engaged in a “full-court press” with their counterparts in the Gulf region leading up to the Oct. 5…
Read More: The White House accuses Saudi Arabia of aiding Russia and coercing OPEC oil producers